Is There Any Demand For a True Gaming Phone?

Nintendo’s profits are in free-fall as Apple’s iPhone and iPod touch increasingly eat into the sales of the portable Nintendo DS. But isn’t it time somebody built a real gaming phone?

Before the fanboys come at me in full force, let me say that I know how great the iPhone is. The large screen and intuitive controls make for a solid gaming experience, and the accelerometer adds a fun, innovative twist. And iPhone users have the luxury of shopping at a retail outlet that offers a mind-blowing 100,000-plus applications, many of which are compelling, enjoyable games.

But a quick look at some recent best-sellers proves that the iPhone is still viewed by most users as a platform for casual games — not immersive, console-type offerings. While Madden and Rock Band are selling well, most of the popular iPhone titles are either digital board games or the kind of simple, pick-up-and-play offerings that are the foundation of mobile-phone gaming. That contrasts drastically with the PSP, where gamers are enjoying highly-reviewed, sophisticated games like Grand Theft Auto: Chinatown Wars and Dissidia: Final Fantasy.

I think Sony Ericsson — which desperately needs a change in strategy — has a huge opportunity to target an untapped market with a PSP phone. Not only does Sony (which owns the joint venture with Ericsson) already have a vast library of content, the move could be a huge boost for Sony Ericsson’s new app store. But there are other players who could find success with a game-centric phone. Nokia flopped a few years ago with its Ngage handset and has failed to execute in the superphone era, but the Finnish manufacturer could breathe new life into both its handset lineup and its mobile Internet service business with a handset designed specifically for gamers. Nintendo could jump in with a phone version of its DS, although executives have denied any such handset is in the works. And Microsoft is considering creating a handheld Xbox device that plausibly could support voice.

A true gaming phone wouldn’t have the broad appeal of the iPhone, of course, and would have to be a bit larger than most phones on the market to provide a more immersive gaming experience. And developing a handset that can compete on price with modern smartphones will certainly prove difficult. But I think there’s a sizable audience of users who’ll spend a couple hundred dollars on a converged device built specifically for console-type games. If someone can build it — and offer it at a reasonable price — the gamers will come.

@Pierre-Marie — I agree, a true gaming phone would have to offer more sophisticated controls and perhaps a bigger screen than the iPhone. A larger device surely would lose some mainstream appeal but could be very attractive to fans of the twitch-type games we’re used to on consoles.

@Mike — I think taking a page from Apple’s playbook and offering a voice-enabled version as well as a non-phone is a great idea. And the first player to do it would have a great advantage.

We won’t know if there is a market for a gaming phone until a true gaming/console company produces one. Nokia was (and is not) a gaming company, but Sony and Nintendo (and Microsoft) are. Each of these brands have tens of millions of loyal users who are tied to both the company’s hardware as well as the exclusives on the device.

I actually think the company that could surprise everyone here is Nintendo. They are similar to Apple in terms of a hugely dedicated and loyal fanbase and they know how to do elegant and innovative hardware. If they did a game phone, it would sell in the tens of millions in Japan alone, and then they could try and make a market in the U.S. and Europe markets by providing young phone users with a fun and user-friendly game phone.

@sergio – So – when does the betting pool start for arrival date of the Nintendo-phone?

Seriously – the next-gen portable from Nintendo will have mobile broadband, if not be a phone. I can see them taking the Apple strategy of doing both a non-phone (the Touch) and a phone for teen and older. I think the phone would be a huge seller, while they could sell the Nintendo “Touch” to young children and tweeners and those older folks who were happy with their existing phone.

I’m not sure a dedicated gaming phone would find a market. Nokia jumped into this segment with the N-Gage on-phone games and online market. They just announced they are closing it end of the year as the sales never generated.

It indicates to me that adding good gaming to a good phone, a la the iPhone/ iPod Touch, is a viable opportunity. Making a gaming phone with the primary focus on the gaming experience not so much.

If I were Sony (or Nokia, or MS or any player in the smartphone arena) I wouldn’t merely imitate the iPhone but I’d rather try to add characteristics the iPhone doesn’t have and that are immediately identified by the users.
You can’t beat the iPhone on music or apps in general since the device is well known for managing them quite nicely. But if the iPhone minimalist design is a good thing for some users, it lacks controllers (like 3 or 4 easy to use buttons) for a rich game experience.
^^^Is there a market for a true gaming phone? Sure since there is a market for gaming PCs that cost 2 to 4 times the price of basic PCs. Moreover, Apple has proven for more than 2 decades that you can be wealthy if you dominate a niche market…^^^

If Apple’s 4G iPhone is received as an upgrade to the Jesus phone with INCREDIBLE UNMATCHED gaming capabilities, watch out! It would make market domination inevitable (remember the touch and the Apps Store).

What would it take? The missing piece is the ARM Cortex-A9 dual processor. Apple’s a senior licensee and it’s rumored that Apple has its PA_RISC team working on proprietary extensions of the licensed design.

I’d bet Apple delivers mobiles based on this design within the next 9 months. It’s a no brainer since their work forwarding powerful gaming would also

– double or triple battery life

– be used in four blockbusters (iPhone, touch, iTab, a NEW Apple TV) with early year run rates of 80M, 13oM, and 200M